CIMB records RM1.41bil net profit in 3Q

CIMB group chief executive officer Datuk Abdul Rahman Ahmad

KUALA LUMPUR: CIMB Group Holdings Bhd, which posted a net profit of RM1.41bil in the third quarter ended Sept 30 (3Q), is firmly on track to exceed its FY22 targets as it approaches the year-end.

“Notwithstanding this, we are maintaining our cautious stance for the year ahead as we expect some tapering in loan demand given the rising interest rate environment and intensified competition for deposits in line with economic activity.

“Accordingly, we will focus on sustaining our deposits franchise with a strong emphasis on current accounts and saving accounts (CASA) retention, and build on loan growth judiciously as we focus on managing credit risk. We will also continue to grow targeted segments such as the affluent and wealth management business, transaction banking, and our regional Asean network business,” group chief executive officer Datuk Abdul Rahman said in a statement.

He added that a key focus area was its investments into technology and operations, and it anticipates investing RM900mil for FY22 to further enhance its digital platforms and strengthen technology resilience.

“Moving forward, we will maintain our focus and remain guided by our mid-term Forward23+ strategic plan, which we are now almost midway though, in realising our aim to be the leading focused Asean bank,” Abdul Rahman said.

CIMB reported a pretax profit of RM2.2bil a net profit of RM1.41bil, compared to the pretax profit of RM333mil and net loss of RM100.6mil registered in 3Q21.

The bank said the strong profit rebound was largely due to significant growth in operating income of 13.7% and the absence of exceptional items in 3Q21 relating primarily to the non-cash write-down in value of CIMB Thai.

Revenue for the quarter rose to almost RM5bil against RM4.4bil a year ago while earnings per share (EPS) stood at 13.43 sen versus loss per share of 1.07 sen.

Its capital remains strong with a common equity tier 1 (CET1)ratio of 14.1% as at Sept-22, from 13.9% as at Sept-21.

For the first nine months (9M22), CIMB posted a net profit of RM4.11bil, or EPS of 39.69 sen on revenue of RM14.6bil.

CIMB said its core net profit increased by 23.2% to RM4.73bil, translating to core EPS of 45.6 sen with core annualised return on average equity (ROE) improving to 10.4% from 9.0% recorded in 9M21.

The strong performance was driven by higher operating income, contained cost escalation as well as lower provisions across key markets.

Its net interest income (NII) grew 6.8% largely due to strong loan growth and improvement in net interest margin (NIM) in Malaysia and Singapore.

Core non-interest income (NOII) also recovered, growing by 4.2% year-on-year (YoY) to RM3.49bil driven by stronger fee and commission income and higher non-performing loan (NPL) recoveries.

CIMB’s total gross loans growth momentum continued, rising 9.0% YoY driven by strong demand across key markets and segments in tandem with the growth in regional economies post-pandemic.

However, deposits growth was comparatively tempered, growing by 2.5% YoY as spending increased from the reopening of the economy.

Total CASA expanded by 2.8% YoY with the CASA ratio sustained at 41.7% as at Sept-22.

CIMB said continued cost discipline led to core cost-to-income ratio (CIR) improving by 160 bps, from 47.7% to 46.1%, with 9M22 core operating expenses rising only 2.8% YoY to RM6.74bil mainly attributed to technology investments.

Accordingly, the group’s 9M22 core pre-provisioning operating profit grew strongly by 9.3% to RM7.87bil.

“Strong operating income driven by loan growth across all businesses and markets, continued cost discipline and lower provisions contributed to the group’s positive performance in 9M22.

“This reflects the post-pandemic economic recovery in the regional economies we operate in, as well as the positive momentum from initiatives implemented under our Forward23+ strategic plan in reshaping our portfolio and making focused investments in profitable segments,” Abdul Rahman said.

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CIMB , Abdul Rahman Ahmad , Forward23+ , loans , deposit


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